I stumbled across a great quote attributed to Stewart Butterfield (Slack, Flickr) from this Forbes article about the ever-bumpy Salesforce integration approach:
“The problem has been, there’s no incorporation of the Slack culture into the Salesforce culture… Unless there is some element of that, then it’s not integration in any sense. It’s just the elimination.”
I think this encapsulation rings true. Having been in the management team on both sides of decent-sized business acquisitions (both acquiring and being acquired), i’ve learned firsthand that buying another company is much harder than it appears on the surface.
It is not just a financial transaction where the cost is the monetary value you’re paying to close the deal, it’s the integration of two separate company cultures, mindsets, and varied expectations around ownership and urgency. If the two cultures are in stark contrast to each other it can be very difficult, if not impossible, to merge them together effectively.
There is no magic formula to getting an acquisition right, but it is very important for the acquiring team to have some combination of the following:
An executive sponsor at the C-Level who feels a sense of ownership and responsibility for the integration - even if the business is large and has a diverse organisation that needs to be integrated, you need a named and visible champion.
You should assume this person will lose the vast majority of their productive time to this mission, so make sure it’s not someone who has a lot of existing critical-path ownership that they cannot easily hand over.
A proper integration plan that is crafted ahead of the purchase, and then iterated and extended once it closes. You need to set some form of a deadline to the obvious actions (consolidation of specific administrative systems, transition of reporting lines etc), even if it is updated as complications or complexity is uncovered.
Without this, you should expect to defer decisions as you get distracted by other things in your business.
Someone in the management team with the scar tissue of acquiring a similar-shaped company in the past. If you don’t have this person available, consider investing in a consultant (or small team) that you trust.
There are lots of easy mistakes to avoid, and not doing so will cost you momentum and trust.
Setting expectations with your team that successful acquisitions are a process of both give-and-take. Per the quote above, it can be very easy for the company being acquired to feel crushed by an acquirer’s relentless sense of “not-invented-here”ism and failure to see the value in things they have built before - be it tech, processes, organisational principles of communication patterns.
You must go into the acquisition knowing that change is a two-way street, or you risk churning all the talent that you’re paying so much for.
These are just some of the things that I think are important in executing an acquisition well - there is no one-size-fits-all playbook, but I think the above is a pretty good start.